FPIs Sold Indian equities worth Rs 7998 Crore; extend selling streak on high US bond yeilds

In the first week of October, Foreign portfolio investors extended their selling streak on record-high US bond yields and stronger US dollars. FPIs reportedly offloaded Rs7998 crore of Indian stocks. As of Friday, October 6, 2023, the Foreign portfolio investors have offloaded a total of Rs6,024 crore taking into account debt, debt-VRR, equities, and hybrid, reported NSDL (National Securities Depository Ltd). Kindly note that Foreign portfolio investors’ Rs7998 crore offloaded amount of Indian equities also includes bulk deals and investments in the primary market. In this column, we have unraveled the trend of Foreign portfolio investors during the first week of October. Stick with this page and go through it till the end.

FPIs

Reportedly Foreign portfolio investors sold stocks worth Rs 9412 crore in the cash market in the first four days of the first week of October. It came after three months when FPIs reversed the prior three-month trend of sustained buying and emerged as net sellers last month. Increasing US bond yields have been the prime reason for the outflow of Foreign portfolio investors since last month, according to experts. Take a look below and find out more details.

The Chief Investment Strategist of Geojit Financial Services, Dr. V K Vijayakumar said, “The dominant factor impacting capital flows to markets in recent weeks has been the steadily rising US bond yields. Early days of October witnessed a rout in the US bond market which took the 30-year bond yield to 5 per cent briefly. The benchmark 10-year yield is consistently over 4.7 percent forcing the FPIs to sell in emerging markets,” Since FPIs were net sellers last month people have been scrambling to web to know the reason. Read the further section on why the FPIs were net sellers in September.

Foreign Portfolio Investors became net sellers last month in the cash market due to the increasing price of the US dollar index and the US 10-year bond yield remained high are short-term negatives for Foreign Portfolio Investor capital flows to emerging markets like India. In the last week of September, soaring crude oil prices also weighed on FPI market behavior. Analysts claim Foreign institutional investors (FIIs) sold Rs25,000 crore in cash markets last month.  Last week of September, the US Treasury yields closed at a 16-year high mark and crude oil prices almost hit $98 per barrel amid concerns over soaring interest rates for an extended period.